Overview of China's Metals Production in December 2024 and Forecast for January 2025

SMM China's Monthly Base Metals Production Data Is Scheduled for Release at Month-End, Aiming to Uncover the True Fundamentals and Provide Industry Participants and Investors with a Clearer Understanding of the Future Trends in the Nonferrous Metals Market.

Overview of China's Metals Production in December 2024 and Forecast for January 2025

Copper Cathode

In December, SMM China's copper cathode production increased by 90,400 mt MoM, up 8.99%, and rose 9.62% YoY, exceeding expectations by 8,700 mt. From January to December, production increased by 620,500 mt YoY, up 5.42%. The significant increase in December production was mainly due to the following reasons: 1. Smelters previously under maintenance resumed production; 2. Newly commissioned smelters continued ramping up; 3. Some smelters boosted production at year-end; 4. The extended statistical period for some smelters (from November 26 to December 31 instead of the usual November 26 to December 25) also contributed to the production surge. Consequently, the sample operating rate of the copper cathode industry in December was 87.73%, up 7.29 percentage points MoM. Among them, large smelters' operating rate was 92.53%, up 7.72 percentage points MoM; medium-sized smelters' operating rate was 78.73%, up 8.35 percentage points MoM; and small smelters' operating rate was 69.86%, down 1.15 percentage points MoM. Smelters using copper concentrates had an operating rate of 92.1%, up 8.5 percentage points MoM, while those not using copper concentrates (relying on copper scrap or copper anode) had an operating rate of 77.7%, up 2.1 percentage points MoM. Entering January, after the production surge in December, many smelters experienced varying degrees of production decline due to tight copper concentrates and blister copper supply (as of December 27, SMM's weekly imported copper concentrates index was $6.91/mt, and SMM's weekly blister copper RCs in south China was 800 yuan/mt). Additionally, the shorter statistical period in January also contributed to the production decline. Affected by the reverse invoicing policy implemented across regions, copper scrap supply decreased in January, leading to a significant production decline in smelters producing copper cathode from copper scrap. Based on production schedules, SMM expects domestic copper cathode production in January to decrease by 88,200 mt MoM, down 8.05%, but increase by 37,500 mt YoY, up 3.87%. The sample operating rate of the copper cathode industry in January is expected to be 80.70%, down 7.03 percentage points MoM. Among them, large smelters' operating rate is expected to be 84.49%, down 8.04 percentage points MoM; medium-sized smelters' operating rate is expected to be 73.28%, down 5.45 percentage points MoM; and small smelters' operating rate is expected to be 67.71%, down 2.15 percentage points MoM. Smelters using copper concentrates are expected to have an operating rate of 85.1%, down 7 percentage points MoM, while those not using copper concentrates (relying on copper scrap or copper anode) are expected to have an operating rate of 69.5%, down 8.2 percentage points MoM, ending three consecutive months of increases.

Aluminum

According to SMM statistics, China's aluminum production in December 2024 (31 days) increased by 4.13% YoY, with cumulative production from January to December up 3.89% YoY. In December, multiple aluminum smelters in Sichuan and Guangxi reduced production. Specifically, in Sichuan, high alumina and electricity costs led to severe losses and production cuts, while in Guangxi, some smelters reduced production due to technological transformation, with plans to resume in Q4 2025. Resumption progress in Sichuan and Guizhou stalled during the month, mainly due to high alumina prices and weak demand and prices in the off-season, reducing the motivation for resumption. Projects in Xinjiang, Inner Mongolia, and Ningxia proceeded as planned. During the month, the proportion of casting ingots increased in many regions, while the proportion of liquid aluminum decreased by 1.22 percentage points MoM and 1.99 percentage points YoY. Based on SMM's liquid aluminum proportion data, domestic aluminum casting ingot production in December increased by 8.23% YoY to approximately 1.03 million mt.

Capacity Changes: By the end of December, SMM statistics showed that China's existing aluminum capacity was approximately 45.71 million mt, with operating capacity around 43.53 million mt, and the industry's operating rate increased by 2.49 percentage points YoY to 95.38%. Currently, domestic aluminum smelters' operating capacity shows both increases and decreases. The increase mainly comes from the ramp-up of new projects at a smelter in Xinjiang, while the decrease is primarily due to production cuts at multiple smelters in Sichuan due to losses and at some smelters in Guangxi due to technological transformation. Additionally, a capacity replacement project at a smelter in Inner Mongolia is proceeding as planned and is expected to be completed within the year, while a capacity replacement project in Ningxia has been completed.

Production Forecast: Entering January 2025, domestic aluminum operating capacity is expected to remain stable, with the negative impact of earlier production cuts on output becoming evident. SMM has learned that no additional smelters plan to cut production. By the end of December, the annualized operating capacity of domestic aluminum remained stable at 43.53 million mt/year. As the Chinese New Year holiday approaches, downstream demand weakens, and some billet plants reduce production, the proportion of liquid aluminum is expected to decrease further to around 70% in January. Future attention should focus on changes in aluminum capacity across regions and the operating conditions of downstream sectors such as aluminum billets.

Alumina

According to SMM data, China's metallurgical-grade alumina production in December 2024 (31 days) increased by 1.67% MoM and 9.80% YoY. As of December 31, China's metallurgical-grade alumina existing capacity was approximately 103.02 million mt, with actual operating capacity slightly down by 0.44% MoM, and the operating rate was 86.30%. For the full year 2024, domestic metallurgical-grade alumina production increased by 4.86% YoY. During the month, environmental protection-related production cuts in Shanxi and maintenance at some capacities in Shandong led to a slight decline in operating capacity. However, as downstream aluminum production also saw reductions during the month, the slight surplus in alumina supply and demand persisted, with the surplus narrowing.

Next Month's Forecast: Entering January, SMM has learned that domestic alumina refineries have no large-scale maintenance plans, and environmental protection-related production cuts may recover. Domestic metallurgical-grade alumina operating capacity is expected to reach 89.77 million mt/year. On the raw material side, there is no further news on the resumption of domestic ore production, and supply remains tight. For imported ore, as of December 27, domestic port bauxite weekly arrivals totaled 3.66 million mt, up 637,900 mt from the previous week. Weekly departures from major ports in Guinea totaled 3.2006 million mt, up 162,000 mt from the previous week, while weekly departures from major ports in Australia totaled 1.1807 million mt, up 448,400 mt from the previous week. The lifting of the rainy season's impact has led to a recovery in domestic bauxite arrivals. In December, the average weekly bauxite arrivals at domestic ports were 3.428 million mt/week, up 241,700 mt/week from November's 3.1863 million mt/week. Additionally, SMM has learned that Guinea's average weekly bauxite shipments for the first three weeks of December were 3.47 million mt/week, significantly improving from the pre-rainy season average of 3.15 million mt/week in June 2024, which is expected to support the high operating capacity of alumina in the future.

SMM Will Continue to Monitor the Ramp-Up of New and Resumed Alumina Capacities.

Overseas Aluminum

According to SMM statistics, overseas aluminum production in December 2024 increased by 0.6% YoY, with a monthly average operating rate of 87.7%, up 0.1% MoM and 1.1% YoY. For the full year, overseas aluminum production increased by 1.0% YoY.

In New Zealand, the Tiwai Point aluminum smelter, which ended power rationing-related production cuts in September, is actively resuming production. Its total capacity awaiting resumption is 125,000 mt, and full production is expected to be restored by February 2025. Currently, the smelter's utilization rate has recovered to approximately 80%.

UC RUSAL announced on November 26 that it plans to cut annual production by 6% due to soaring global alumina prices and slowing domestic demand. However, SMM has learned that this reduction plan does not involve existing capacity but rather the cancellation of a planned 300,000 mt expansion project at the Boguchansky aluminum smelter in Siberia. Over the next few years, UC RUSAL's total annual capacity is expected to remain around 4.5 million mt, with production levels consistent with recent years.

In Europe, the resumption of operations at three aluminum smelters under Germany's Trimet Group is progressing. By the end of 2024, the utilization rate of these three plants had recovered to approximately 66%. Meanwhile, aluminum production in Iran has seen YoY declines for eight consecutive months, with full-year 2024 production expected to decrease by approximately 5% YoY.

Production dynamics in southern Africa have also drawn market attention. South32 announced in mid-December that it had withdrawn its production guidance for the Mozal aluminum smelter in Mozambique due to social turmoil. On December 19, the company issued a further statement indicating that transportation disruptions at the Mozal smelter had eased, allowing alumina shipments from the port to the smelter to resume. However, the smelter's normal operations remain dependent on future developments. If transportation issues are not fully resolved, the company may have to further cut production or even shut down some pots. Additionally, South32 revealed that its Worsley alumina refinery might open part of its alumina supply to the third-party market in the future.

Looking Ahead to January 2025, SMM Expects Overseas Aluminum Production to Increase by 1.5% YoY, with the Average Operating Rate Rising to 88.4%, Up 0.6% MoM and 0.4% YoY. Notably, as alumina prices decline, the second phase of an Indonesian aluminum smelter's project, previously halted due to cost pressures, is expected to resume commissioning in early 2025.

Overseas Metallurgical-Grade Alumina

According to SMM statistics, overseas metallurgical-grade alumina production in December 2024 decreased by 0.7% YoY, with full-year production down 0.6% YoY. The average operating rate of overseas alumina refineries in December was 81.5%, up 0.6% MoM but down 3.6% YoY.

In Australia, Rio Tinto announced on November 25 that it had lifted the force majeure on Gladstone alumina shipments, stating that the QAL and Yarwun alumina refineries had recovered from earlier incidents, with current production back to normal. However, the incidents are expected to result in an annual production loss of approximately 250,000 mt for the two refineries. Additionally, on December 10, the Pinjarra alumina refinery in Australia experienced a power outage and caustic soda leakage due to a natural gas supply disruption. The refinery, with an annual capacity of 4.7 million mt, is expected to fully restore production capacity within 7 to 10 days.

On December 20, South32 announced that its Worsley alumina project had received approval from the Western Australian environmental authorities to extend the project's operational life, ensuring the continued operation of bauxite mining and alumina production under certain conditions. The project still requires final approval from the federal government, which is expected to be completed in early 2025.

Looking Ahead to January 2025, Overseas Metallurgical-Grade Alumina Production Is Expected to Increase by 0.7% YoY, with the Average Operating Rate Rising to 82.7%.

Primary Lead

In December 2024, China's primary lead production turned to a downward trend, decreasing by 1.61% MoM but increasing by 6.19% YoY. For the full year 2024, cumulative primary lead production decreased by 2.11% YoY. The total capacity of surveyed enterprises in 2024 was 6.0063 million mt.

According to the survey, December marked the final month of 2024, with primary lead production meeting the expected decline outlined in the previous report, and the decline further expanded.This month, the primary lead production decline was mainly due to factors such as the year-end routine maintenance of lead smelting enterprises and production cuts caused by equipment upgrades and rectifications at smelting enterprises. Additionally, in mid-to-late December, environmental protection inspections were carried out in the Hunan region, leading to production cuts at most lead smelting enterprises, which further widened the decline in lead production. Even though during this period, the grade of lead concentrates fed into furnaces at lead smelting enterprises in Inner Mongolia, Henan, Qinghai, and other regions increased, and the production ramp-up of new production lines brought some incremental output, it still failed to reverse the downward trend in production for the month.

In addition, the annual production of primary lead in 2024 recorded negative growth, mainly attributed to the fundamental imbalance between the limited supply of lead concentrates and the overcapacity at the ingot end. This led to lead concentrate TC dropping to a historical low of negative TC, causing an overall decline in profits for the lead smelting industry. Consequently, lead products became marginalized in the production configuration of smelting enterprises, even turning into "by-products."

Looking ahead to January 2025, SMM predicts that China's primary lead production will continue its downward trend, with a MoM decline of 3.7%. In January, the Chinese market will usher in the Chinese New Year, with the holiday spanning from late January to early February. In previous years, some lead smelting enterprises chose this period for equipment maintenance, which may drag down January's lead production. Specifically, medium and large lead smelting enterprises in regions such as Hunan, Guangdong, and Guangxi plan to conduct maintenance in January, which is expected to result in a reduction of over 10,000 mt.

Secondary Lead

In December 2024, the production of secondary crude lead increased slightly, up 0.6% MoM but down 6.03% YoY. Meanwhile, the production of secondary refined lead decreased by 0.97% MoM and fell by 10.34% YoY. During December, multiple regions frequently issued orange alerts for heavy pollution weather, significantly impacting secondary lead smelters in provinces such as Anhui, Henan, and Shandong due to environmental protection-related controls. As a major production area for secondary lead, Anhui experienced frequent production cuts and suspensions during the month. In Henan and Jiangsu, vehicle transportation was restricted, affecting raw material arrivals, while in Shandong, smelters faced delays in ramping up production after resuming operations due to environmental controls. Overall, the increase in secondary lead production in December fell short of expectations.

Recently, lead prices have fluctuated downward, and profits for secondary lead have shrunk significantly. Coupled with the impact of winter and lower temperatures on furnace temperatures (especially in northern regions) and tight supply of battery scrap, smelters have shown a strong willingness for maintenance. Some smelters indicated plans for maintenance in January, but the shutdown dates are mostly concentrated at the month-end, with a few smelters considering shutdowns at the beginning of the month. According to SMM statistics, secondary lead production in January 2025 is expected to decline significantly, with a reduction of over 45,000 mt.

Refined Zinc

In December 2024, SMM data showed that China's refined zinc production increased by nearly 10,000 mt MoM or over 1% MoM but decreased by over 12% YoY, falling short of expectations. Cumulatively, domestic refined zinc production in 2024 decreased by nearly 7% YoY. Among these, domestic zinc alloy production in December decreased by over 5,000 mt MoM. Entering December, the MoM increase in production from domestic smelters was below expectations, mainly due to larger-than-expected reductions in regions such as Hunan, Guangdong, and Jiangxi. However, smelters in Qinghai, Shaanxi, Gansu, Sichuan, and Inner Mongolia contributed some incremental production through maintenance recovery and production increases, while new production in Shanxi also supported the overall increase. Overall, production increased slightly.

SMM expects that in January 2025, domestic refined zinc production will increase by over 15,000 mt MoM or nearly 3% MoM. Overall, smelter production is expected to continue increasing in January, mainly because, apart from maintenance-related production cuts in regions such as Hunan, Guangxi, and Sichuan, and some enterprises taking Chinese New Year breaks at the end of January, production in regions such as Hunan, Guangdong, Gansu, Inner Mongolia, Sichuan, and Jiangxi is expected to increase to varying degrees. However, considering the holiday arrangements and reduced production days in February, production is expected to decline in February.

Refined Tin

According to SMM data based on market communication, China's refined tin production in December 2024 decreased by 4.41% MoM but showed a significant cumulative YoY increase of 8.91%. Due to the tightening supply of tin ore and scrap, the overall output of tin ingots showed a downward trend during the month.

In the Yunnan region, the volume of tin ore imported from Myanmar remained at a low level, putting significant pressure on local raw material supply. Most smelting enterprises chose to maintain the status quo or slightly reduce production. If Myanmar's tin ore production ban policy remains unchanged, we expect the production of smelting enterprises in Yunnan to continue declining. Additionally, the continuous decline in tin concentrate TC has fallen below the cost line for some smelting enterprises, leading some to plan production halts before the Chinese New Year.

Meanwhile, in Jiangxi, despite seasonal impacts on scrap supply in November, raw material supply was relatively sufficient, and smelting enterprises achieved slight production increases. However, this growth trend was unsustainable, and in December, most smelting enterprises in Jiangxi saw production declines. In Inner Mongolia and Guangxi, smelting activities remained relatively stable. However, in Anhui and other regions, increased difficulties in raw material procurement impacted smelting enterprises' production, posing significant challenges to maintaining future production levels.

Considering the above factors, we predict that in January, national tin ingot production may continue to decline. Given the significant uncertainties surrounding tin ore imports from Wa State in Myanmar and the worsening raw material supply issues for smelters, market participants need to remain highly vigilant and closely monitor the latest developments in the raw material market to respond promptly to potential market fluctuations.

Refined Nickel

In December 2024, China's refined nickel production increased by 2.2% MoM and 27.6% YoY. The industry's monthly operating rate was 73%, which was basically flat compared to the previous month, with a slight increase. The growth was mainly driven by the continuous production increases of top-tier enterprises.

From a fundamental perspective, December is traditionally an off-season, and domestic alloy and electroplating demand did not show significant improvement. However, nickel prices in December were predominantly on a downward trend. Coupled with the arrival of some Russian nickel long-term contracts in late December, the re-export of Jinchuan-branded nickel plates, and shipments from some refined nickel enterprises, spot premiums/discounts were suppressed. Downstream procurement prices were relatively low, and purchase willingness was moderate. Regarding export profitability, export profits narrowed significantly during the month, which may dampen the enthusiasm of refined nickel enterprises with export and LME delivery qualifications to expand production.

As the new year approaches, despite the impact of the Chinese New Year holiday at the end of January, top-tier refined nickel enterprises have not shown intentions to cut production. However, some small and medium-sized refined nickel enterprises may implement small-scale production cuts due to limited profit margins and holiday factors. It is expected that in January 2025, China's refined nickel production will decrease by 0.3% MoM but increase by 27.68% YoY.

Nickel Pig Iron (NPI)

In December 2024, China's NPI production in physical content decreased by approximately 1.79% MoM, while metal content decreased by approximately 0.98% MoM. Both physical and metal content of NPI declined during the month, mainly due to environmental protection inspections in north China during winter and the gradual expansion of smelter losses, which led to a slight weakening of actual production compared to the previous month. In east China, the physical content of NPI increased slightly, but the grade declined, resulting in limited growth in metal content. In south China, the physical content of NPI decreased slightly, but the grade improved significantly, limiting the decline in metal content. Additionally, both physical and metal content of low-grade NPI decreased, primarily due to the weakening production of 200-series stainless steel and the simultaneous decline in low-grade NPI pig iron output from integrated steel mills. Overall, the reduction in NPI metal content in December was concentrated in integrated low-grade NPI.

In January 2025, China's NPI production in physical content is expected to increase by approximately 0.24% MoM, while metal content is expected to decrease by approximately 3.21% MoM. According to the SMM survey, due to the impact of winter environmental production cuts and low NPI prices, smelter losses have expanded, leading to production declines in traditional smelters in east and north China. From the perspective of integrated 200-series stainless steel mills, as they enter the traditional maintenance period, 200-series production is expected to continue its downward trend, corresponding to a further decline in low-grade NPI production. Overall, domestic NPI metal content is expected to continue its downward trend in January, with an expanded decline.

Indonesian Nickel Pig Iron

In December 2024, Indonesia's NPI production increased by 7.33% MoM and 10.71% YoY. Cumulatively, production in 2024 increased by 7.3% YoY. Following the addition of new RKAB quotas, mines in Indonesia began ramping up production in December, and mainstream smelters maintained relatively sufficient nickel ore inventories. On Obi Island, new production lines began operations, contributing to an increase in overall metal content. In Morowali, production saw a slight decline in December, while in Weda Bay, new production lines reached full production, and some high-grade nickel matte production lines shifted to producing high-grade NPI, driving significant growth in December's output. Overall, Indonesia's high-grade NPI production in December showed a notable increase, with some newly commissioned production lines reaching or exceeding full production, continuing the trend of supply expansion.

In January 2025, mainstream smelters in Indonesia are expected to maintain raw material inventories sufficient for over two months. Additionally, with weak demand for high-grade nickel matte and poor profitability, the drive to shift production to high-grade NPI remains. Under the unchanged trend of shifting to high-grade NPI, coupled with a slight increase in production in the Morowali region, Indonesia's high-grade NPI production in January is expected to increase by 0.83% MoM and 17.79% YoY.

Nickel Sulphate

According to SMM data, China's nickel sulphate production in December 2024 is estimated at approximately 28,500 mt in metal content, with physical content production at approximately 129,500 mt, representing a MoM decrease of approximately 7.51% and a YoY decrease of approximately 5.28%. On the demand side, top-tier precursor enterprises were the main drivers of increased precursor production demand in December. On the supply side, due to losses at salt plants, some nickel sulphate manufacturers reduced production or conducted maintenance, resulting in limited market circulation of salts. Looking ahead, considering the Chinese New Year holiday, weakening precursor demand, and expectations for production cuts due to losses at salt plants, China's nickel sulphate production in January 2025 is expected to decrease to approximately 26,800 mt in metal content, with physical content production estimated at approximately 121,600 mt, representing a MoM decrease of approximately 6.04% and a YoY decrease of approximately 24.04%.

Battery-Grade Manganese Sulphate

In December 2024, China's high-purity manganese sulphate production declined both MoM and YoY. The slight decline in December's production was mainly due to weak demand from downstream ternary cathode precursor enterprises as the year-end approached, with most enterprises only fulfilling long-term contracts. Meanwhile, high-purity manganese sulphate enterprises adopted a cautious production approach due to declining spot prices, reducing production schedules and focusing on destocking. It is expected that in January, due to the Chinese New Year holiday, production schedules will further decrease, and total market production is likely to continue declining MoM.

Electrolytic Manganese Dioxide

In December 2024, China's electrolytic manganese dioxide production declined slightly MoM. The slight decline in December's production was mainly due to a lack of significant demand growth in the primary battery market as the year-end approached, with enterprises generally maintaining a cautious production attitude and focusing on destocking. The secondary battery market also faced challenges, as weak demand for LMO led to reduced demand for lithium manganese dioxide, resulting in decreased production schedules. It is expected that in January, due to the Chinese New Year holiday, the production of manganese dioxide will continue to decline MoM, with a more pronounced decline in lithium manganese dioxide.

Mn3O4

In December 2024, China's Mn3O4 production declined slightly MoM. The decline in Mn3O4 production in December was mainly due to the recent sluggish performance of the LMO market, with overall sentiment remaining pessimistic. Enterprises generally adopted destocking strategies, reducing raw material procurement, which directly impacted the production schedules of Mn3O4 enterprises. The electronic-grade market continued to face oversupply, with short-term supply-demand imbalances difficult to resolve. As the year-end approached, enterprises maintained low production schedules. It is expected that in January, due to the Chinese New Year holiday, market demand will remain sluggish, and Mn3O4 production will continue to decline MoM, with a particularly significant reduction in battery-grade Mn3O4.

High-Carbon Ferrochrome

According to SMM data, in December 2024, China's high-carbon ferrochrome production continued to decline, down 10.83% MoM but up 0.33% YoY. Among them, production in Inner Mongolia decreased by 5.09% MoM. In December, major stainless steel mills significantly reduced their procurement prices for high-carbon ferrochrome, exacerbating the losses faced by ferrochrome plants and weakening their production willingness. Some ferrochrome plants chose to halt production after depleting their raw material inventory, leading to increased maintenance and production cuts during the month. Combined with the realization of previously accumulated production suspensions, overall production declined. However, large ferrochrome enterprises, which mainly rely on futures chrome ore, maintained certain production levels despite significant losses due to pressure to recover production funds and restrictions from power supply agreements, limiting the extent of production cuts.

Looking ahead to January 2025, stainless steel production is expected to decline significantly, and the demand for pre-holiday stockpiling is weakening, further softening the demand for ferrochrome. The already oversupplied ferrochrome market is expected to face greater difficulty in digesting inventory as the Chinese New Year holiday approaches. As a result, some manufacturers plan to take early holidays, while those still in production focus on fulfilling long-term contract orders. For new long-term contract orders in 2025, ferrochrome manufacturers indicate a small room for negotiated supply reductions. Domestic high-carbon ferrochrome production is expected to continue declining in January 2025.

Stainless Steel

According to an SMM survey, in December 2024, China's total stainless steel production increased by approximately 1.1% MoM and 6.53% YoY, with cumulative YoY growth of about 3.03%. Among them, 200-series stainless steel production increased by approximately 3.35% MoM, 300-series by 1.01% MoM, and 400-series by 10.10% MoM.

In December, stainless steel production showed a significant increase overall, mainly reflected in the 400-series stainless steel. The primary reason was the temporary tight supply of 400-series stainless steel after a stainless steel mill in east China halted production in October. Despite entering the off-season at the end of Q4 and a sharp decline in the bidding price of high-carbon ferrochrome, the overall price of 400-series stainless steel remained relatively stable. The market demand gap for 430 stainless steel urgently needed to be filled, and cost-profit recovery drove production increases. State-owned stainless steel mills in south and north China significantly increased their 400-series production, with crude steel production rising by approximately 52,000 mt. For the 300-series, stainless steel mills showed mixed production adjustments: on one hand, some mills with integrated production lines added new capacity recently, maintaining high operating rates due to relatively better profit levels; on the other hand, some state-owned and smaller private mills faced severe losses due to high NPI procurement costs, leading to a sharp decline in operating rates as off-season orders dropped significantly. Overall, 300-series production increased by nearly 17,800 mt. For the 200-series, due to maintenance on the hot rolling line of a major stainless steel mill in south China and declining profits, overall production schedules decreased significantly, while other mills maintained stable production schedules. Total 200-series production decreased by approximately 33,600 mt.

Entering January 2025, stainless steel finished product prices and downstream demand are expected to drop to a low point. On the raw material side, NPI and high-carbon ferrochrome prices have recently stabilized after declines, but losses in stainless steel finished products are intensifying. Coupled with the Chinese New Year holiday arrangements at the end of January, overall operating rates and production schedules of stainless steel mills are expected to decline significantly. A short-process stainless steel mill in south China plans to halt production for maintenance starting January 1 for approximately 1.5 months, potentially affecting total production by about 120,000 mt. Total stainless steel production in January 2025 is expected to decrease by 8.53% MoM, with 200-series down 8.05% MoM, 300-series down 8.98% MoM, and 400-series down 7.9% MoM.

Electrolytic Manganese

According to SMM data, in December 2024, China's electrolytic manganese production increased by approximately 2% MoM and over 10% YoY. From January to December 2024, total electrolytic manganese production in China increased by over 10% YoY. The production increase in December was mainly due to the delivery of long-term contract orders by major electrolytic manganese plants near year-end, coupled with increased procurement enthusiasm driven by stockpiling demand before Christmas overseas. Production increased significantly. In Sichuan, production growth was limited due to production pressure at electrolytic manganese plants. In Guizhou and Hunan, some plants had maintenance plans, leading to slight production decreases. Overall, the increase in production outweighed the decrease, resulting in a net production increase in December.

In January, due to weak pre-holiday procurement enthusiasm from downstream steel mills, demand for electrolytic manganese is expected to show limited growth. Electrolytic manganese plants are inclined to reduce production, and some plan to halt operations for maintenance during the Chinese New Year holiday, leading to an overall reduction in supply. Based on production schedule surveys, January production is expected to decrease MoM.

SiMn Alloy

According to SMM data, in December 2024, China's total SiMn alloy production increased by over 3% MoM but decreased by over 9% YoY. From January to December 2024, cumulative SiMn production in China decreased by over 10% YoY. The production increase in December was mainly due to the commencement of production at some SiMn plants in north China that had started operations earlier. The overall operating rate in major production areas in the north remained high, leading to slight production growth. In the south, due to production pressure, previously halted SiMn plants had no plans to resume production. However, some major SiMn plants increased operating rates to fulfill long-term contract orders, resulting in significant production growth. Overall, the increase in production outweighed the decrease, leading to a net production increase in December.

In January, some SiMn plants plan to conduct maintenance around the Chinese New Year holiday, focusing on selling inventory. Production is expected to decrease slightly. Additionally, limited pre-holiday stockpiling demand from steel mills and insufficient alloy demand support in the market are expected to lead to a stronger expectation of production cuts.

Silicon Metal

According to SMM data, in December 2024, China's silicon metal production decreased by 73,100 mt, down 18.1% MoM and 5.2% YoY. From January to December 2024, annual production increased by 1.098 million mt, up 28.9% YoY.

In December, silicon metal production in Xinjiang, Yunnan, and Sichuan decreased to varying degrees. The decline in Xinjiang's operating rate was mainly due to maintenance on some capacities by leading enterprises in December, with the maintenance period spanning the entire month, significantly impacting production. In Yunnan and Sichuan, the decline in operating rates was primarily due to seasonal effects during the dry season, with rising electricity prices and continuous declines in silicon prices pushing operating rates to record lows in recent years. Meanwhile, some new silicon metal capacities were released, contributing to production growth in Inner Mongolia and other regions, where production increased MoM.

In January, leading enterprises in Xinjiang are expected to further expand production cuts, with operating rates anticipated to decline further. In Yunnan and Sichuan, the number of operating silicon enterprises is expected to decrease, leading to further production declines. In Inner Mongolia and Gansu, production is expected to increase. Overall, China's silicon metal operating rate in January 2025 is likely to remain weak, with monthly production expected to drop to around 310,000 mt.

Polysilicon

In December, China's polysilicon production decreased significantly compared to November, with a decline of approximately 2% MoM. Many polysilicon enterprises have reached a point where further production cuts are not feasible. Production increases were mainly attributed to one enterprise ramping up production at a newly commissioned site, while 3-4 enterprises reduced production. Overall, production showed a slight decline.

PV Module

According to SMM statistics, in December, China's PV module production decreased by approximately 10.9% MoM, with an industry operating rate of about 44.2%. For the full year 2024, China's cumulative PV module production increased by approximately 12.2% YoY. As the year ended, domestic and international demand drivers weakened, new orders decreased, and enterprises aimed to control year-end inventory levels by lowering operating rates. Production at both domestic and overseas bases of Chinese enterprises declined. Most module enterprises opted to produce based on demand. Operating rates of first- and second-tier enterprises decreased, with a growing number of top-tier enterprises significantly cutting production due to high turnover inventory at year-end, the retreat of the installation rush peak, reduced export tax rebate rates, and losses caused by cost-price inversion.

In January 2025, China's PV module production schedule is expected to continue declining, down 18.7% MoM from December 2024, with an industry operating rate of about 35.95%. The main reductions will come from domestic bases of Chinese enterprises, while overseas bases, especially in Southeast Asia, have gradually ceased operations by the end of 2024. In January, the holiday period will reduce production days, affecting the planned production of each enterprise. Top-tier enterprises are expected to see significant production cuts in January, while second- and third-tier enterprises, which have already maintained low operating rates for a long time, will see limited reductions. Module enterprises will plan production based on their own orders and future order visibility. Most enterprises, facing off-season demand and loss pressures, will focus on selling inventory and take extended holidays. Many small factories plan to take holidays lasting from half a month to a month, resuming production only when orders are available.

Solar Cell

In December, solar cell output increased by 2.03% MoM, with significant growth in Topcon183 and 210 sizes. In early to mid-December, cell demand weakened, but demand rebounded in late December as module manufacturers began stockpiling, boosting cell demand and increasing production schedules among cell manufacturers. In January 2025, due to the Chinese New Year holiday, integrated top-tier manufacturers are expected to reduce production, while specialized top-tier cell manufacturers are expected to maintain stable operating rates. During the holiday period, the overall operating rate for solar cells is expected to reach 51.49%, with January solar cell production schedules decreasing by 13.3% MoM.

PV Film

According to SMM statistics, China's PV film production in January is expected to decrease by 16% MoM from December. At the enterprise level, most companies are expected to see production declines, while some are expected to maintain or even increase production. The production decline is mainly due to reduced demand caused by lower module production schedules and significant losses in film production, leading to the closure of production sites and reduced orders. Since October, PV film production in Vietnam has been increasing due to the expansion of the Indian module market.

PV-Grade EVA

According to SMM statistics, domestic PV-grade EVA production in January is expected to decrease by 6.7% MoM, with total domestic supply expected to decline by 9.39% MoM. At the enterprise level, one company is expected to increase production due to a production schedule adjustment, switching back to EVA from LDPE. Two companies are expected to reduce production, one due to equipment maintenance and a switch to LDPE production, and the other due to planned maintenance. On the import side, domestic PV-grade EVA prices are expected to remain weak, and the Chinese New Year holiday is expected to reduce import volumes. On the demand side, module production schedules are expected to decrease by 12.4% MoM. Overall, PV-grade EVA is expected to face a situation of reduced supply and demand.

PV Glass

In December, domestic PV glass production continued to decline, albeit at a smaller rate, down 0.51% MoM from November. Plans for furnace maintenance were postponed, with only two 1,200 mt/day furnaces in Hubei undergoing maintenance at the end of the month. Although December had one additional production day compared to November, production still declined, maintaining a downward trend. In January, domestic furnace maintenance plans are expected to continue, with glass production expected to decline further.

DMC

In December, domestic silicone DMC production increased by 2.95% MoM and 17.37% YoY. Domestic silicone supply showed mixed trends in December, with some facilities increasing and others decreasing operating rates. Overall production increased, mainly due to the continued ramp-up of new capacity by domestic monomer enterprises. Although some production lines in central China underwent maintenance and halted production, the reduction was relatively limited, leading to an overall production increase. In January, domestic operating rates are expected to remain relatively high, but some maintenance plans have yet to be implemented. Domestic silicone production in January is expected to remain above 200,000 mt.

Magnesium Ingot

According to SMM data, China's magnesium ingot production in December 2024 decreased by 6.4% MoM. This month, some smelters in the magnesium ingot market increased production, while others reduced it. The main reason for the production decline was the dual impact of supply surplus and weak demand, which caused magnesium ingot prices to continuously drop over the past two months. When prices fell below the break-even line for smelters, they were forced to cut production or halt operations. Meanwhile, the reasons for production increases included two factors: first, smelters that had previously suspended production for maintenance gradually resumed operations, leading to increased supply. Second, some enterprises adjusted daily production based on orders and inventory levels, resulting in higher output.

According to SMM, the reduction and suspension of production in major magnesium-producing regions continued in December. Affected by weak demand, magnesium ingot smelters in these regions faced losses across the entire production cycle. Some smelters officially announced production cuts, and due to the cold winter, it was difficult for those that had previously reduced or suspended production to resume operations in the short term. Magnesium ingot supply continued to decline, and inventories on the supply side have dropped to safe levels. On the demand side, news of factory shutdowns spread, leading to cautious sentiment among downstream enterprises and a conservative procurement attitude. From the perspective of supply and demand, magnesium ingot supply remained relatively loose. It is expected that magnesium prices will remain stable in the short term, and January 2025 magnesium ingot production is expected to remain flat MoM.

Magnesium Alloy

According to SMM data, China's magnesium alloy production in December 2024 increased by 1.4% MoM, with the overall operating rate of magnesium alloy enterprises remaining stable. As the aluminum-magnesium ratio gradually decreased, high aluminum prices significantly enhanced the cost-effectiveness of magnesium alloys, steadily increasing attention from end-use applications. The operating rates of some magnesium alloy enterprises continued to rise. Additionally, the stabilization of upstream magnesium ingot prices alleviated the "rush to buy amid continuous price rise and hold back amid price downturn" sentiment caused by raw material price fluctuations. Furthermore, downstream die-casting plants and 3C manufacturers stockpiled as needed before the holiday, creating a favorable trading atmosphere in the magnesium alloy market. Market sentiment remained stable, and some magnesium alloy enterprises chose to resume production, maintaining an upward trend in overall magnesium alloy production.

As the year-end approaches and downstream die-casting and 3C manufacturers gradually shut down, some magnesium alloy enterprises may choose to lower operating rates to avoid inventory buildup due to stagnant demand. SMM expects magnesium alloy production in January to decrease slightly.

Magnesium Powder

According to SMM data, China's magnesium powder production in December 2024 increased by 5.4% MoM. This month, magnesium powder production varied among enterprises, with most maintaining normal production. Leading enterprises saw a significant increase in orders due to pre-holiday stockpiling by downstream steel mills, resulting in an upward trend in magnesium powder production.

A representative from a major magnesium powder enterprise noted that domestic economic weakness, thin steel mill profits, and frequent fluctuations in magnesium ingot prices made downstream procurement attitudes more cautious. However, low-priced magnesium ingots may stimulate order recovery. SMM predicts that domestic magnesium powder production in December will remain around 8,500 mt.

Titanium Dioxide

According to SMM data, China's titanium dioxide production in December 2024 saw a slight MoM decline.

In early December, the significant rise in sulphuric acid costs led leading enterprises to maintain stable policy prices, with most titanium dioxide enterprises also holding firm on their quotations. Additionally, nearly 40% of enterprises were in a state of production cuts or suspension, and existing producers were generally not operating at full capacity. The market widely anticipated pre-holiday restocking in overseas markets.

As the year-end approached, high raw material costs and sluggish product sales prompted some titanium dioxide plants to plan production suspensions, with the market showing a trend of production halts and intensified destocking efforts. Furthermore, as overseas markets entered the pre-holiday restocking period, exports helped mitigate the impact of declining domestic demand. Some titanium dioxide manufacturers faced tight supply and issued price adjustment notices, raising domestic prices by 500 yuan/mt. However, given the currently subdued market demand, whether these price increases will materialize remains to be seen. Titanium dioxide prices will continue to be negotiated on a case-by-case basis, with the market overall showing a stable yet slightly weak trend. SMM predicts that domestic titanium dioxide production in December will remain stable.

Sponge Titanium

According to SMM data, China's sponge titanium production in December 2024 remained flat MoM. Entering early December, the sponge titanium market continued to face a supply-demand imbalance, with persistently weak demand in the downstream titanium market exerting significant operational pressure on the sponge titanium industry. New orders were scarce, and enterprise inventories gradually increased. Some sponge titanium enterprises attempted to adjust prices to cope with the market, and pre-holiday restocking by downstream manufacturers helped stabilize previously raised prices. According to SMM analysis, sponge titanium production in January is expected to remain stable.

Light Rare Earth

In December 2024, domestic Pr-Nd oxide production continued to see a slight MoM decline, while Pr-Nd alloy production increased MoM. The reduction in Pr-Nd oxide production was mainly concentrated in Sichuan and Shandong, while the increase in Pr-Nd alloy production was primarily in Sichuan and Inner Mongolia.

According to an SMM survey, some metal plants that had been in a state of production cuts resumed normal operations in December. This change directly led to a slight 1% increase in national Pr-Nd alloy production compared to November.

Regarding separation plants, operating rates in Shandong and Sichuan further declined. Some separation enterprises plan to suspend production for maintenance in January, which is expected to directly impact Pr-Nd oxide production, leading to a significant MoM reduction in January.

Medium-Heavy Rare Earth

In December 2024, the production of medium-heavy rare earth oxides decreased MoM, with dysprosium oxide and terbium oxide production showing notable declines of 2.7% and 3.8%, respectively. In contrast, gadolinium oxide production saw a slower MoM decline of only 0.4%.

According to an SMM survey, the import situation of Myanmar ore did not return to normal levels in December as expected. This significantly impacted ion-adsorption ore holders, who generally showed a reduced willingness to sell. Meanwhile, due to persistently weak rare earth oxide market prices, separation plants exhibited low interest in raw material procurement. Additionally, some separation plants plan to suspend production for maintenance in January, which will further reduce demand for ion-adsorption ore.

NdFeB

In December 2024, domestic NdFeB magnetic material production saw a slight MoM increase of approximately 10%. According to an SMM survey, early December did not witness a significant increase in downstream orders. Due to weak support from end-use demand, downstream markets maintained a cautious purchasing strategy, with the anticipated large-scale pre-Chinese New Year stockpiling failing to materialize. By mid-December, as raw material prices slightly declined, downstream orders began to show a slight increase, mainly concentrated among leading large enterprises. These top-tier enterprises, with advanced production technology and stable customer bases, experienced robust production, while small and medium-sized enterprises saw no significant order growth and maintained low production enthusiasm, with a pessimistic outlook for the market.

According to an SMM survey, most magnetic material enterprises plan to gradually halt production around January 20 and will not resume until after the Chinese New Year holiday. Therefore, NdFeB magnetic material production in January is expected to see a significant decline, with most enterprises resuming normal production by mid-February.

Molybdenum Concentrate

According to SMM data, China's molybdenum concentrate production in December decreased by approximately 1% MoM.

In December, China's molybdenum market demand remained strong, supporting molybdenum prices at high levels. Molybdenum mining enterprises continued to operate at high efficiency, although some regions experienced a slight decline in overall output due to temporary decreases in ore grade and recovery rates.

Entering January, midstream and downstream enterprises are expected to increase restocking demand for molybdenum raw materials, reducing the likelihood of molybdenum prices declining. Molybdenum mining enterprises have few maintenance plans. Molybdenum concentrate production in January is expected to remain stable.

Ferromolybdenum

According to SMM statistics, China's ferromolybdenum production in December decreased by approximately 2.8% MoM.

In December, steel mills released year-end restocking demand for ferromolybdenum. Combined with previously low inventory levels due to concerns over molybdenum price fluctuations, ferromolybdenum procurement volume exceeded 10,000 mt this month. Supported by this, ferromolybdenum smelters generally maintained high operating rates. However, mismatches between tender prices and production costs, along with the lack of low-cost molybdenum raw material inventories at some smelters, led to occasional losses. Some smelters proactively reduced operating rates to mitigate losses, resulting in lower ferromolybdenum production.

In January, most ferromolybdenum smelters have yet to secure sufficient molybdenum raw materials and face cost pressure. Maintenance or holiday plans during the Chinese New Year may also impact production. Ferromolybdenum production is expected to continue to decline slightly.

Ammonium Paratungstate (APT)

According to SMM statistics, China's APT production in December increased by approximately 9% MoM.

As the year-end approached, some APT smelters increased operating rates to build inventory for the new year's production and shipments. Additionally, a few smelters slightly boosted production through technological upgrades. These factors collectively drove a significant increase in APT production.

Entering January, difficulties in procuring tungsten raw materials and mismatches between raw material prices and APT spot prices may persist, leading to continued price inversions. Combined with maintenance plans during the Chinese New Year, APT production in January is expected to decline slightly.

Silver

In December, China's #1 silver production decreased by 1.2% MoM and 2% YoY. The slight decline in silver production was mainly due to most enterprises having completed their annual production plans, resulting in stable or slightly reduced output. However, December silver sales significantly increased compared to November, with smelters' sales volumes far exceeding production. This was primarily due to year-end inventory clearance for annual accounting, the upward trend in silver prices in December following a decline in November, and the fulfillment of long-term contract deliveries for processing trade exports. These factors led to a slight decline in silver production but a substantial increase in sales.

In 2025, overall silver market capacity is expected to remain flat compared to 2024, with silver ingot supply also expected to remain stable. The proportion of long-term contracts is anticipated to decrease, with the market focusing on spot orders.

In January, as the Chinese New Year approaches, production at smelters relying on recycled raw materials is expected to decline, while those using ore as raw material are likely to maintain stable production. Overall production is expected to decrease MoM.

Silver Nitrate

In December, silver nitrate production dropped 8.7% MoM and 11.4% YoY. Entering December, due to adjustments in downstream demand and silver prices in December being unsuitable for stockpiling, market stockpiling demand was weak, with downstream primarily consuming inventory to clear stock for easier accounting and to reduce capital occupation. As a result, in December, downstream mainly placed orders based on rigid demand, and production schedules across enterprises were more relaxed compared to November, with relatively small pressure on production departments. The urgency of downstream orders also eased compared to November. As January and the Chinese New Year approach, downstream enterprises began preparing for holidays, leading to limited demand recovery. Therefore, production in January is expected to decline.

Antimony Ingot

According to SMM estimates, China's antimony ingot production (including antimony ingots, crude antimony converted, and antimony cathode) in December 2024 increased by 15.01% MoM compared to November. Specifically, among the 33 surveyed producers by SMM, 10 manufacturers were shut down, one less than the previous month; 19 manufacturers experienced reduced production, unchanged from the previous month; and 4 manufacturers maintained normal production, one more than the previous month. Regarding antimony ingot production, December production rose again after a slight rebound in November. Many market participants considered this a normal phenomenon, as December is the last month of the year, and many manufacturers rush production to meet annual production targets. Additionally, the relatively sufficient domestic raw material supply contributed to increased production for some manufacturers in December. Market participants expect that due to the Chinese New Year holiday in January, China's antimony ingot production in January 2025 may decline compared to December 2024, with a possibility of a significant drop.

Note: Since May 2022, SMM has been publishing national antimony ingot production estimates (including antimony ingots, crude antimony converted, and antimony cathode). Thanks to SMM's high coverage of the antimony industry, the survey includes 33 producers across 8 provinces, with a total sample capacity exceeding 20,000 mt and a capacity coverage rate of over 99%.

Sodium Antimonate

According to SMM estimates, China's production of first-grade sodium antimonate in December 2024 increased significantly by 13.84% MoM compared to November. Following the rebound in October, production surged again in December. The significant increase in December was mainly due to manufacturers rushing production to meet annual targets as the year-end approached. Among the 11 surveyed producers by SMM, 2 manufacturers were in shutdown or commissioning status in December, while most sodium antimonate producers maintained stable production, and the majority experienced varying degrees of production increases, leading to the overall production surge. Market participants expect that with the Chinese New Year holiday at the end of January, the production of first-grade sodium antimonate in January 2025 is likely to remain stable, with a lower likelihood of another significant increase.

Note: Since July 2023, SMM has been publishing national sodium antimonate production estimates. Thanks to SMM's high coverage of the antimony industry, the survey includes 11 producers across 5 provinces, with a total sample capacity exceeding 75,000 mt and a capacity coverage rate of 99%.

Refined Bismuth

According to SMM estimates, China's refined bismuth production in December 2024 decreased significantly by approximately 28.77% MoM compared to November. After consecutive declines in September and October, production fell sharply again in December. From the perspective of manufacturers, many entered equipment maintenance as the year-end approached, coupled with tightening raw material supply and reduced enthusiasm for raw material purchases. Although some manufacturers needed to accelerate production in Q4 to meet annual targets, most experienced production declines, with only a few showing slight increases. Therefore, the significant production drop in December was within market expectations. Among the 24 surveyed producers by SMM, 6 manufacturers saw significant production declines, 2 experienced notable increases, and 1 ceased production, leading to the overall sharp decline in December's refined bismuth production compared to the previous month. Market participants widely expect that with the Chinese New Year holiday at the end of January, China's refined bismuth production in January 2025 is likely to continue declining, with little chance of stabilization.

Note: Since October 2022, SMM has been publishing national refined bismuth production estimates. Thanks to SMM's high coverage of the bismuth industry, the survey includes 24 producers across 8 provinces, with a total sample capacity exceeding 50,000 mt and a capacity coverage rate of over 99%.

Lithium Carbonate
In December, domestic lithium carbonate production continued to rise rapidly, up 9% MoM and 59% YoY. Driven by strong downstream demand maintaining high production levels and the presence of certain arbitrage opportunities in the futures market, upstream lithium chemical plants showed sustained enthusiasm for production.

By raw material type, lithium carbonate production derived from spodumene in December increased significantly, up 16% MoM. The growth was partly driven by higher production at some lithium chemical plants due to profits from the delivery market and partly by the switch from lithium hydroxide production to lithium carbonate, as well as the ramp-up of newly commissioned production lines. Lithium carbonate production derived from lepidolite also continued to climb, up 12% MoM. The increase was supported not only by sustained growth driven by strong demand but also by additional output from newly resumed smelters. Lithium carbonate production derived from salt lake decreased due to weather impacts, down 14% MoM. Meanwhile, a leading battery cell manufacturer maintained a high level of orders under tolling agreements for recycled batteries, keeping lithium carbonate production from recycling stable, up 1% MoM.

Entering January 2025, the Chinese traditional festival—Chinese New Year—is approaching. On one hand, some upstream lithium chemical plants are planning maintenance around the holiday, which is expected to reduce production. On the other hand, downstream demand has shown signs of weakening, which is also affecting production sentiment at upstream lithium chemical plants. Domestic lithium carbonate production in January 2025 is expected to decrease by 9% MoM.

Lithium Hydroxide
According to SMM, China's lithium hydroxide production in December 2024 saw a significant MoM decline of approximately 22%, while increasing 15% YoY.

Supply side, from the perspective of raw material types, smelting output decreased by about 23% MoM, up 20% YoY. On one hand, over the past two months, due to a high proportion of long-term contracts in the market, spot order demand for lithium hydroxide has been limited. Although lithium chemical producers have maintained a firm stance on quotes, price increases have been slow. Coupled with raw material prices remaining high due to mines standing firm on quotes, the smelting cost losses have not significantly improved, prompting some lithium chemical plants to reduce production to focus solely on long-term contract supply. On the other hand, due to weak downstream demand, some major lithium chemical plants have reduced orders under tolling agreements. Combined with maintenance activities at lithium chemical plants since December, smelting output has shown a significant MoM decline.

Causticisation output remained flat MoM, as orders under tolling agreements showed no significant changes and new production lines ramped up slower than expected, keeping overall supply stable.

Demand side, ternary cathode material production in December decreased by approximately 7% MoM. With the continued decline in 5-series production, the share of 8-series increased to 40%. Overall performance, driven by end-user rush for installations, was better than the same period in previous years.

Export side, according to customs data, China's lithium hydroxide exports in November reached 5,494 mt, down about 30% MoM and 64% YoY. Exports to South Korea and Japan were 3,609 mt and 1,615 mt, accounting for 66% and 29% of China's total exports, respectively. These figures represent MoM declines of 37.4% and 4.8%, and YoY declines of 70% and 36%, marking the lowest levels in nearly three years. Overseas end-user sales in recent months have fallen short of expectations, coupled with inventory buildup, leading to a continued decline in export volumes.

In summary, with supply-side reductions significantly outpacing demand-side reductions in December, there was a notable destocking trend during the month. Looking at the production schedule for January 2025, most lithium chemical plants are expected to undergo maintenance, leading to a continued weakening of market supply. January production is expected to decrease by more than 10% MoM and over 5% YoY, with the destocking trend persisting throughout the month.

Cobalt Sulphate
In December 2024, China's cobalt sulphate production increased 9% MoM and 6% YoY. The main reason for the production increase in December was that some producers, whose inventory had previously been at high levels, resumed production after completing destocking. Although some recycling enterprises in the market suspended production, the overall increase outweighed the decrease, resulting in a MoM increase in cobalt sulphate production in December. It is expected that in January 2025, due to the Chinese New Year holiday, the overall cobalt sulphate production will decrease.

Co3O4
In December 2024, China's Co3O4 production declined MoM but slightly increased YoY. The main reason for the production decline in December was weak downstream demand for LCO, which limited Co3O4 procurement to just essential needs, with fewer market inquiries. Leading Co3O4 producers maintained high operating rates, but their planned production decreased. It is expected that in January, due to the impact of the Chinese New Year holiday, the production schedule of Co3O4 producers will significantly decline. Coupled with the lack of apparent stockpiling demand from downstream LCO enterprises, Co3O4 production is expected to decline MoM again.

Ternary Cathode Precursor
In December 2024, China's production of ternary cathode precursors increased 1% MoM and was up 13% YoY. Demand side, the production schedule of ternary cathode material plants was slightly adjusted this month. Supply side, the production of top-tier enterprises generally increased. Although significant year-end surges are typical, the production increase was relatively limited due to factors such as weak material demand and inventory control faced by some top-tier enterprises. For most non-top-tier ternary cathode precursor enterprises, production remained largely flat or increased slightly compared to the previous month. However, production declined for some non-top-tier enterprises due to structural shifts in orders. Looking ahead to January, impacted by the Chinese New Year break and reduced material production schedules, China's production of ternary cathode precursors is expected to decrease 11% MoM, with YoY growth also likely to decline by 11%.

Ternary Cathode Material
In December 2024, China's ternary cathode material production decreased by 6.5% MoM, up 7.2% YoY, with a cumulative YoY increase of 10.5% for the year. The overall operating rate in December was around 39%, showing a decline compared to October. In terms of supply, the concentration among leading companies remained high in the month, while the production scale of small and medium-sized enterprises further declined. Coupled with year-end adjustments by some downstream battery companies in controlling finished cathode material products, orders for ternary cathode materials decreased in the month.

Regarding series proportions, in December, 5-series ternary cathode materials accounted for 22%, 6-series for 31%, and 8-series for 40%. Compared to the previous month, the proportion of 8-series materials showed a slight increase, while the share of 5-series continued to decline, and the proportion of high-nickel materials kept rising.

From the market structure perspective, the production share of the top 3 companies (CR3) in the month was 45.9%, CR5 was 60.4%, and CR10 reached 79.4%, with market concentration showing a slight increase compared to November.

On the demand side, the domestic production of ternary power battery cells in December decreased by approximately 6% compared to November. Battery companies reduced their year-end production schedules due to inventory control and weakening expectations for a rush for installations.

Looking at the production schedule for January 2025, China's ternary cathode material production is expected to decrease by 4.5% MoM. The market concentration among leading companies is expected to further increase in January, with most manufacturers showing slight production reductions, except for a few companies whose production is expected to rise.

Iron Phosphate
In December, China's iron phosphate production decreased by 2% MoM, up 185% YoY. Supply side, iron phosphate producers maintained high operating rates to ensure sufficient raw material supply for downstream LFP production. Some producers saw significant production increases due to full order books. Raw material side, prices of phosphoric acid and industrial monoammonium phosphate remained high. Additionally, due to reduced production caused by weak demand for titanium dioxide, the supply of ferrous sulphate, a by-product, also declined. As the market for iron phosphate has strong demand for ferrous sulphate, its price rose steadily in December, leading to increased costs for ammonium-based and sodium-based iron phosphate. Coupled with changes in the supply-demand relationship, iron phosphate producers stood firm on quotes, resulting in upward price trends in late December. Since late December marked both month-end and year-end, it was a critical period for negotiating orders. Iron phosphate producers, suffering prolonged losses, strongly sought price increases to mitigate losses. In January, most iron phosphate producers had sufficient orders and continued normal production during the Chinese New Year holiday. Some producers planned maintenance and production line upgrades before the holiday, which might affect January's production. January's iron phosphate production is expected to decline by 6% MoM, up 183% YoY.

LFP
In December, China's LFP production decreased by 3.62% MoM, with a YoY increase of approximately 190%. The overall operating rate slightly declined to 61%.
Supply side, LFP producers remained active in production. Except for slight production cuts by some producers due to year-end factors, others maintained stable production MoM. Demand side, January's overall demand remained robust. Particularly in the ESS sector, overseas rush for installations provided strong YoY support. Near year-end, the power battery sector saw strong production and sales. Coupled with low processing fees, downstream demand remained stable with no significant reduction.
In January, demand side is expected to change. The ESS sector will be affected by the end of the year-end grid connection deadline on December 31, while the power battery sector will face the conclusion of the trade-in policy. These factors are expected to lead to a significant MoM decline in LFP production, estimated at around 11.6%.

LCO
In December, LCO production declined by 3% MoM. Near year-end, end-use demand weakened, and battery cell manufacturers mainly purchased as needed, slowing overall procurement. This trend extended to LCO material producers, where slight order declines led to reduced production schedules. Market structure-wise, December's CR5 stood at 85%, with leading material producers maintaining high operating rates and sufficient orders. In January, due to the Chinese New Year holiday and the off-season at the beginning of the year, LCO production is expected to decline further, down 4% MoM.

LMO
In December 2024, China's LMO production declined MoM but showed slight YoY growth. The decline was mainly due to the lack of significant increases in lithium carbonate prices, which remained low, making it difficult for LMO prices to improve and keeping them near cost levels. Market sentiment remained pessimistic. With year-end approaching, downstream demand was weak, and stockpiling willingness was low. LMO producers focused on destocking and intentionally controlled production. In January, due to the Chinese New Year holiday, most LMO producers are expected to halt production and take holidays, leading to further production declines MoM.

*Survey Methodology
The SMM production survey is conducted by professional analysts through telephone interviews, on-site visits, and other methods to track China's metal producers monthly and produce the China Metal Production Report.
The survey ensures a basic coverage ratio of samples and continuously expands the sample base. It also considers factors such as capacity scale, regional distribution, and enterprise nature to reasonably select and allocate samples, ensuring representativeness of all sub-data.
The monthly report is released at month-end through official channels such as the SMM website (www.smm.cn), WeChat subscription account, and mobile site (m.smm.cn).